A presentation on current types of emission regulations, air quality management systems, and global commitments and factors in Canada. Oil and Gas: How big is the problem and what can we do about it?

1. /Process-Ecology @processecology
EMISSIONS REGULATIONS AND REDUCTIONS
TECHNOLOGY
IN WESTERN CANADA’S OIL & GAS SECTOR
Laura L. Chutny, P.Eng.
17/05/2017
2017©COPYRIGHT PROCESS ECOLOGY INC.
1

2. AIR EMISSIONS – OIL AND GAS
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 2
• Process Ecology Introduction
• What Regulations are there?
• What is Canada doing about it?
• Air Quality Management System
(AQMS)
• Global Committments
• Oil and Gas – How Big Is the Problem
and What can we do about it?

3. PROCESS ECOLOGY INC.
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 3
Founded 2003, Calgary, AB
Engineering consulting, process simulation & optimization,
software development, air emissions estimation and
management
Track record of advanced modelling, simulation and
process design, combining and extending simulators and
rigorous engineering calculations to handle complex
scenarios
CORE COMPETENCIES

4. AIR EMISSIONS - DEFINITIONS
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 4
• Methane – CH4
• Greenhouse Gases – CO2, N2O, HCs
• Risks to Human Health
• Short Lived Climate Pollutants: Black
Carbon, Ozone, Particulate Matter and
others
• Benzene

5. AIR EMISSIONS REGULATIONS BY TYPE
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 5
Methane – CH4
• Alberta – reduce 45% from 2012 by 2025
• New facility standards Directive (mid 2018?)
• Measurement Monitoring and Reporting(MMR) (2018?)
• Leak Detection and Repair (LDAR) (2018?) – already in US
• Voluntary Joint Initiative – reduction and verification
• BC – reduce 45% by 2025
• Target fugitive and vented emissions – legacy facilities
• Offset protocol/clean infrastructure royalty credits – new facilities
• Mandatory LDAR & others – post 2018
• Supporting Efficient Engines, supplying clean LNG

6. AIR EMISSIONS REGULATIONS BY TYPE
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 6
Methane
• Saskatchewan
• No specific provincial regulation
• Federal – reduce 40-45% below 2012 by 2025
• Regulation Timing – adjusted (was 2020, now 2023)
• LDAR
• Compressors – seals and rod packing vents
• Well Completions – prohibit venting
• Process Venting – limit totals, dehy capture requirements
• Pneumatics – low or no emissions

7. AIR EMISSIONS REGULATIONS BY TYPE
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 7
GHG
• Alberta
• SGRR: >50,000 tonnes/yr CO2e, must report
• SGER: >100,000 tonnes/yr CO2e:
• Reduce Emissions Intensity 20% per year by:
• Improving Operations
• Purchase Offsets - $30/tonne in 2017
• Emission Performance Credits from Previous period
• Replaced by Carbon Competitiveness Regulation by 2018
• Carbon Tax: $20/tonne CO2e in 2017; $30/tonne in 2018
• Charged on fuel imported, sold, flared and vented in Alberta
• Natural Gas produced and consumed ON SITE - exempt

8. AIR EMISSIONS REGULATIONS BY TYPE
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 8
GHG
• BC
• GHG Industrial Reporting and Control Act – Climate Action Secretariat
• GHG Emission Reporting Regulation
• >10,000 tonnes/yr CO2e must report
• GHG Emission Control Regulation
• > 25,000 tonnes/yr CO2e must report and verify
• GHG Emission Penalties and Appeals
• Use Western Climate Initiative (WCI) rules to calculate
• Concept of Linear Facilities
• Carbon Tax
• Oil and Gas pay on all combustion of fuels

9. AIR EMISSIONS REGULATIONS BY TYPE
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 9
GHG
• Saskatchewan
• No specific regulation
• Focus on
• Carbon Capture and storage
• Decarbonizing Power System
• Federal
• Greenhouse Gas Reporting Program (GHGRP) – since 2004
• >50,000 tonnes/yr CO2e must report – may change to >10,000
tonnes/yr CO2e in 2018 or 2019 – MANY more facilities will report
• Carbon Tax – minimum $10/tonne CO2e, currently in negotiations
with provinces.

10. AIR EMISSIONS REGULATIONS BY TYPE
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 10
Other Air Emissions
• Federal – NPRI (National Pollutant Release Inventory)
• Air, Water and Ground
• Full reporting only at > 20,000 man-hours/yr (Under Review)
• Smaller facility reporting: Part 4 and 5 only
• Particulate Matter
• SOx
• NOx
• VOCs
• CO
• NH3
• Alberta/BC/Saskatchewan – Benzene Reporting
• Type I Carcinogen
• From Dehydrators: Alberta Directive 39, BC Oil and Gas Operations
Manual Appendix J; Saskatchewan Directive S-18

11. AIR EMISSIONS REGULATIONS BY TYPE
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 11
Flaring and Venting (F&V)
• Source of GHG, Methane and Other Gases
• Alberta
• Directive 60 – rules about F&V, especially conservation
of solution gas
• Also reported in various ways through Petrinex
according to rules in Directives 7, 17 and 76
• BC Oil and Gas Commission (OGC)
• Flaring and Venting reduction guideline – eliminate all
routine flaring by 2016 (?)
• Saskatchewan
• Directives R01, S-10, PNG017 and S-20

12. AIR QUALITY MGMT SYSTEM (AQMS)
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 12
AQMS – Federal Initiative (Except Quebec)
• Canadian Council of Ministers of the Environment – 2012
• Comprehensive approach to reducing air pollution
• Canadian Ambient Air Quality Standards (CAAQS)
• Canadian Environmental Protection Act (1999)
• Newly reduced limits on PM2.5 and Ozone
• Human health impacts – respiratory (Particulates and Smog)
• Aspirational Targets to Drive Improvements -
• Benzene Targets
• SO2 at ground level from flaring of acid gas

13. AIR QUALITY MGMT SYSTEM (AQMS)
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 13
• BLIERs – Base Level Industrial Emission Requirements
• Major Industrial Emitters
• Ensure Good Base-Level Environmental Performance
• Minimum Performance Standards
• Oil and Gas must follow the MSAPR – Multi-Sector Air Pollutant
Regulations
• Limits on NOx from large combustion sources (Boilers,
heaters, stationary engines
• Future limits on SO2, VOCs, NH3 and PM likely

14. AIR QUALITY MGMT SYSTEM (AQMS)
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 14
• Provincial and Regional
• Directives as indicated above
• Special Air quality management areas – e.g. Peace River
• AER Directive 84 – HC Emission Controls and Gas Conservation Peace River
Area – effective April 1, 2017
• Provincial Guidelines:
• Alberta
• Substance Release and reporting Regulations under EPEA
(Environmental Protection and Enhancement Act
• Alberta Ambient Air Quality Objectives (AAAQO)
• BC
• Oil and Gas Waste Regulation
• Air Quality Objectives (BC AQO):
• PM10, PM2.5, Ozone, SO2, NO2, Formaldehyde, TSP (total
Suspended particulate)
• Saskatchewan
• Environmental Management and Protection Act and Regulations
• Focus on SO2, NO2, PM2.5, PM10, CO and VOCs

15. AIR EMISSIONS GLOBAL FACTORS
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 15
• AIR doesn't respect BORDERS
• Conference of the Parties - recently COP21 (Paris, 2015) and COP22
(Marrakech, 2016)
• Reduce HFCs
• Reduce Aviation Emissions
• Ratification of Paris agreement – limiting global warming
• Carbon Tax Commitment
• United Nations Environment Programme:
• Canada a founder of CCAC – Climate and Clean Air Coalition
• Focus on Short Lived Climate Pollutants (SLCPs):
• Black carbon, ozone, methane, HFCs
• Targeting Transportation, Electric generation, Oil & Gas Methane,
HFCs, AQMS

16. AIR EMISSIONS GLOBAL FACTORS
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 16
• Global Methane Initiative (GMI)
• Voluntary, Canada co-chairs Oil and Gas Subcommittee
• Canada focusing on:
• Oil & Gas
• Landfills
• Agriculture
• Global alliance for Clean Cookstoves
• Global Gas Flaring Reduction Partnership (World Bank) (Alberta)
• Public/Private
• Research, Best practices, Regulatory work
• United Nations Economic Commission for Europe
• Best practices on reducing emissions
• Arctic Council

17. AIR EMISSIONS – OIL AND GAS NUMBERS
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 17
• Federal Estimates
• 2015 (most Recent): 189 Mt CO2e - 26% of national emissions
(NIR to UNFCCC)
• GHGRP – reports only 81 Mt CO2e (only facilities that are large)
• Alberta:
• Methane: 31.4 Mt CO2e as Methane, 70% of provincial CH4
emissions
• REFERENCE:
• 722 Mt CO2e – Canada’s Total GHG Emissions in 2015
• ~50,000 Mt CO2e – Worldwide Total

18. AIR EMISSIONS – OIL AND GAS NUMBERS
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 18
• Clearstone Report – (2011 data) and Current Alberta Government:
GHG Source % of Total
Fuel Combustion 59.8%
Fugitive Equipment Leaks 11.9%
Reported Venting 10.4%
Unreported Venting 9.2%
Releases of Formation CO2 4.8%
Flaring 3.9%
Methane Source % of Total
(Clearstone)
% of Total
(AB Govt)
Reported Venting 31.7%
48%
Unreported Venting 28.2%
Fugitive Equipment Leaks 36.1% 46%
Other (Flaring, Tanks, etc.) 4.1% 6%

19. AIR EMISSIONS – OIL AND GAS NUMBERS
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 19
• New Data (2017):
• St. F.X – BC Montney Shale – 111,800 tonnes CH4 annually
• Environmental Defence / Greenpath – Alberta Methane emissions from oil
and gas could be 60% higher than originally thought (significantly more
leaking equipment – unreported venting)
• Purdue University – refineries and Gas power plants – methane leaks 2-120
times higher than EPA estimates
• Environmental Sci & Tech (2015) – Natural Gas Processing and Gas Gathering
– Actual Methane emissions substantially higher than current EPA estimates
• Many others – generally measurements are higher than estimates have been
• Baseline
• Hard to capture
• Factored estimates increasingly inaccurate
• Can’t measure it all – 100,000+ sources in Alberta alone
• NEED BETTER MODELS!

20. AIR EMISSIONS – OIL AND GAS REDUCTIONS
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 20
• First Targets?
• Fugitives
• Venting
• Combustion
• Protocols
• Existing
• Pneumatics
• Solution Gas Conservation
• Upcoming
• LDAR (Leak Detection and Repair) ?
• Best Practices
• CAPP Documents
• CSA Z620.1
• API Compendium
• EPA’s AP-42

21. AIR EMISSIONS REGULATIONS
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 21
• WHAT are the Regulations?
• It’s convulted!
• WHAT are we DOING about it?
• Federal initiatives
• WHAT is our place in the Global Picture?
• World leader
• HOW Big is the Problem?
• Numbers vary, hard to estimate
• WHERE to reduce?
• Fugitives and Venting

22. THANK YOU
17/05/20172017©COPYRIGHT PROCESS ECOLOGY INC. 22
• QUESTIONS?
• CONTACT:
Laura Chutny
laura@processecology.com
403-478-4758